Oregon Biodiesel Tax Breaks for Retail Fuel Stations

April 20, 2019 By , ,

Biodiesel Prices and the Oregon “Fry Bill”
(the Retail Biodiesel Tax Waiver)

 

The Oregon Fry Bill and retail sellers of biodiesel

Oregon has a tax incentive to encourage the use of low CO2 biodiesel fuels. In Oregon, if you use a “yellow grease” or waste vegetable oil based biodiesel, the state waives your on-road diesel tax of $0.34 a gallon. You can see this tax waiver at work when you pull up to a retail biodiesel pump in Oregon because it’s usually the most competitive price for diesel fuels.

Why does Oregon have an incentive for blends of biodiesel?

The lowest CO2 emitting diesel blend product is typically biodiesel manufactured from used vegetable oil. To that end, Oregon waives on-road state fuel taxes on biodiesel blends sold at retail locations throughout the state. Commercial cardlocks, wet-hose fleet fueling, and bulk fuel deliveries are not covered under this incentive program.

Where can you take advantage of the Oregon Fry Bill?

Only retail outlets for “yellow grease” or used vegetable cooking oil biodiesel are allowed to waive the Oregon fuel tax of $0.34 a gallon when selling B20 to B99 blends of biodiesel to the public. (Note: B20 is 20% biodiesel and 80% petroleum diesel. B99 is 99% biodiesel.)

Given the wide availability of biodiesel in the Pacific Northwest, this program sometimes causes confusion as to what is an Oregon state tax exempt biodiesel blend and what is not.  Nearly all of the retail B20 biodiesel fuel sold under Oregon’s Fry Bill program comes from the SeQuential Biodiesel plant in Salem, Oregon. SeQuential also provides a list of all of the locations where their product can be found with the Oregon tax exempt B20.

How does an Oregon fuel retailer take advantage of the Fry Bill?

Star Oilco is a Common Carrier and Fuel Wholesaler. If you are a retail fuel seller and gas station operator, we can make it easy to get biodiesel that conforms with this program. To help you make sense of what you need to understand, we have pulled together the Oregon Revised Statues and Oregon Administrative Rules into one place for those who have questions about this program.

Oregon’s Imposition of  On-Road Fuel Taxes (and exemptions) ORS319.530

ORS319.530(1) To compensate this state partially for the use of its highways, an excise tax hereby is imposed at the rate of 34 cents per gallon on the use of fuel in a motor vehicle.

FOLLOWED BY

ORS319.530(5)(a) Except as provided in paragraph (b) of this subsection, the excise tax imposed under subsection (1) of this section does not apply to diesel fuel blended with a minimum of 20 percent biodiesel that is derived from used cooking oil.

(b)The exemption provided under paragraph (a) of this subsection does not apply to fuel:

(A)Used in motor vehicles that have a gross vehicle weight rating of 26,001 pounds or more;

(B)That is not sold in retail operations; or

(C)That is sold in operations involving fleet fueling or bulk sales. [Amended by 1959 c.188 §2; 1967 c.463 §2; 1981 c.698 §2; 1981 c.703 §2; 1983 c.727 §§2,6; 1985 c.209 §13; 1987 c.899 §§9,11,15; 1989 c.865 §2; 1991 c.497 §§8,9; 1995 c.311 §1; 2009 c.865 §49; 2013 c.648 §1; 2017 c.750 §42]

Occasionally there a question of what is a “used cooking oil” biodiesel under Oregon’s law. This question is answered by the Oregon Administrative Rules under Chapter 330 Division 170 Biomass Producers or Collector Tax Credit.

OAR 330-170-0020 Definitions 

OAR330-170-0020(12) “Used Cooking Oil” means waste vegetable oil from food preparation.

Compared to a Virgin Oil under the Oregon Administrative Rule’s Definition

OAR330-170-0020(14) “Virgin Oil” means un-used oil that has been extracted from an agricultural crop.

Functionally what separates a “Used Cooking Oil” from a “Virgin Oil” is it spending time in a deep fryer to be used for some other food production process.

If you have any questions about Oregon’s Fry Bill and getting biodiesel made from Waste Vegetable Oil, Star Oilco is here to make that easy for you. We currently serve several retail gas stations selling B20 biodiesel made from waste vegetable oil. If you want to participate in this Oregon program, message us below to start the conversation.

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